Next month, a group of high-profile Vancouver names will launch a condo development on a golf course in Delta, B.C.
Ron Toigo, best known for owning the Giants junior hockey league and the White Spot restaurant chain, is overseeing development of a Palm Springs-style country club and 500-unit housing project, featuring a 5,500-yard golf course. His partners in the Tsawwassen Golf and Country Club include singer Michael Bublé, music manager Bruce Allen, and hockey coach veteran Pat Quinn.
“They have significant investments in this,” Mr. Toigo says. “We are all friends invested in it, and I think them being involved is a bonus for the development.”
Mr. Toigo purchased the property in 2007, but the project took more than two years of public hearings in order to extend and redevelop the golf course. The $400-million project, which has “a Disneyland feel to it,” will be sold in five phases over the next two years.
It wasn’t just a case of a famous singer looking for a random investment. Mr. Bublé, who is also one of the co-owners of the Giants, is learning to play golf. Golf is a popular passion for celebrities and athletes, which is why golf course investments are of interest.
“It was an easy golf course and Michael is really just learning the game right now – it was something he was comfortable playing,” says Mr. Toigo. “I think him being involved is a big plus. It gets down to trust, and he trusts what I’m doing.”
Like everybody else, celebrities have discovered that real estate in British Columbia is a relatively sound long-term investment. While some like glamorous golf course investments, others stick to basic housing projects. Jason Priestley, best known for his role in Beverly Hills 90210, is the star of the new HBO Canada series, Call Me Fitz. Although he makes a living from acting, he has maintained a tidy sideline buying up real estate in B.C. since the mid 90s.
“I can understand why other actors and musicians, people like that, want to get into real estate development, because although there might be slight corrections now and again, real estate certainly in my lifetime has always increased in value,” says Mr. Priestley, on the phone from Los Angeles, where he’s lived for 25 years.
He owns a resort in Ucluelet, B.C., property in Gastown, is co-owner of the acclaimed Black Hills winery near Oliver, B.C., and once owned an apartment building in Vancouver. Not surprisingly, he is grateful that he chose his home province for real estate investing rather than the United States.
“I started investing in Vancouver and B.C. real estate back in the mid 90s, when I was still doing Beverly Hills 90210,” he says. “I was very aggressive about it, and looking forward and seeing where Vancouver was headed, and what was going to happen. I have always imagined myself moving back to Vancouver, so I was trying to invest in things in Vancouver that would help with that.
“I have had a great experience investing in real estate in B.C.”
In the last few years, former National Hockey League players Trevor Linden and Geoff Courtnall have been in the news for their real estate interests. Both have successfully made the transition into development, which is a common second career for athletes who thrive on competition, winning and risk. Unlike celebrities who quietly invest in someone else’s project, they roll up their sleeves and get involved in every aspect of negotiation and construction.
“There’s a risk to becoming a professional athlete – you’re giving up your life and opportunities, and education, to commit to something very, very difficult to achieve,” says Mr. Courtnall. “Real estate development is very similar. It takes a lot of pieces in the puzzle to come together.”
Whether their high profiles have helped market their projects is a matter of debate. When a famous person takes on risk, the fall can be greater, at least from a publicity standpoint.
For example, few would have known or cared much that there was an 83-unit project approved by Ladysmith city council unless the investors hadn’t been Pamela Anderson and Mr. Courtnall. That project fell through last year when Ms. Anderson pulled out, but it wasn’t the first condo/townhouse project to ever get kiboshed or put on hold. Because it never moved beyond the rezoning stage, it wasn’t a particularly costly venture. It took a lot of time and energy, Mr. Courtnall says.
“It took two and a half years to get it rezoned for condos on a nice piece of property Pam has on the ocean,” he explains. “Then the market slowed down after the rezoning went through and she and her advisers decided to put the project on hold, which was probably a very good decision.
“But any time there’s a project that gets hyped and it doesn’t work, I think there’s always a negativity coming. But that one did work, and we go it zoned and it’s a great piece of property. Hopefully there’s a day when the timing will be right.”
When you’re famous, the golden rule is not to make your involvement known until negotiations are over. The high-profile name only comes in handy when it’s time to market and promote the project, as Ms. Anderson had intended to do.
Mr. Courtnall and brother Russ learned the hard way that their famous names can work against them.
“When they find out you are trying to buy a piece of property, word gets out and everybody wants to see what you are trying to buy. Before you know it, everybody is putting in an offer,” says Mr. Courtnall. “It happened to Russ and me on a condo project in Victoria. We met with the people who were selling and they were giving us first right to buy, and we agreed to pay what they wanted. The next day, they said somebody else had offered them $100,000 more and they sold it.
“Live and learn.”
Victoria-based Peter Laughlin, of Wessex Project Management, partnered with Mr. Courtnall on the Ladysmith project. He has worked with other high-profile names.
“Sellers naturally think a well-known name is leverage to demand more cash,” he says. “Generally, you have to keep their name out of negotiations when you are buying the property, because people will think that they will pay more.”
Mr. Priestley concurs.
“If you are trying to buy something, you try to keep your identity a secret for as long as you can. It’s hard to negotiate with people when they see you on TV every week. If you try to give them a low-ball offer, and they’ll just say ‘no.’”
On the flipside, a high profile can attract co-investors, says Mr. Priestley.
“I think it can initially help you, certainly if you are looking for partners or outside monies to come in, to help close a deal for you.
“I think that being a person of note can definitely help open doors for you.”
It’s simply a matter of getting more attention, Mr. Toigo says.
“I think it’s anything that makes people talk. Michael’s dad came to a number of the public hearings. Bruce [Allen]too. All those things will help,” he says.
“And when we were going through rezoning, we had acknowledgements from the general public that these guys were involved with this.
“It should be a plus, because they don’t invest in anything. There are lots of examples of people getting caught up in things that go wrong, but I’ve been doing this since 1981.”
Mr. Courtnall generally teams up with other investors, but he knows too that they must wonder how much business acumen a hockey player can bring to the table.
“They don’t say it, but I’m sure that’s at the back of their minds,” says Mr. Courtnall.
“Let’s face it, none of us are experts in the field, and I think people want to see what you’ve done that’s successful either on your own, or with another investor.
“A lot of the people that are investing in different deals in B.C. look at the merit of the project and then the financial side of whether it can make money. They would judge it more on those opportunities, than me being involved.”
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